Hedge funds posted their second consecutive month of negative returns in April with the Eurekahedge Hedge Fund Index down 0.13%1 as global markets continued to falter amid a sluggish start to the year. On a year-to-date basis, hedge funds are up 0.78%, slightly ahead of the MSCI World Index2 which returned 0.75% in the first four months of the year. All hedge fund strategies, with the exception of long/short equities funds posted positive performance-based gains during the month as the larger hedge funds (by asset base) outperformed their smaller peers. Billion dollar hedge funds tracked by Eurekahedge posted performance gains of US$1.3 billion in April while recording net asset inflows of US$6.8 billion.
Final asset flow figures for March revealed that managers incurred performance-based losses of US$2.7 billion while recording net asset inflows of US$13.2 billion as hedge funds continued to attract strong capital allocations from investors in 2014. Preliminary data for April shows that managers have posted performance-based gains of US$0.58 billion while net asset inflows for the month stand at US$9.5 billion, bringing the current AUM of the industry to US$2.09 trillion – the highest level on record.
Figure 1: Summary monthly asset flow data since January 2011
Key highlights for April 2014:
- Hedge funds were up 0.78% year-to-date; total assets of the global hedge fund industry are at a new high of US$2.09 trillion, with net asset inflows for April 2014 year-to-date totalling US$52.4 billion. This is US$2.7 billion higher than for the same period last year.
- The Eurekahedge North America Hedge Fund Index is up 2.20% year-to-date, outperforming the S&P 500 index which gained 1.93% over this period. On a year-to-date basis, North American fund managers are in the lead having delivered performance-based gains of US$16.0 billion while recording net asset inflows of US$25.4 billion.
- Long/short equities funds record their 17th consecutive month of positive net asset flows with net capital allocations at US$46.9 billion year-to-date. Total assets in long/short equities hedge funds stand at US$708.7 billion and nearing close to their historical high of US$756 billion reached in December 2007.
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1Based on 57.26% of funds which have reported April 2014 returns as at 15 May 2014
2 MSCI AC World Index (Local)